Are the TBTs Sending Us a Message?

In a stealth sort of way, the ProShares UltraShort 20+ Year Treasury (TBT) climbed to a marginal new high today at 15.89 (so far) off of the July 25 all-time low at 14.08, which represented a 1.38% low print in 10-Year US Treasury YIELD!

Why exactly has the TBT been climbing lately? Put another way, why NOW might the longer end of the US Treasury bond market iShares Barclays 20+ Year Treasury Bond (TLT) be making a TOP?

Yes, we are all aware that the treasury market is a very crowded, dangerous trade, filled with parked funds from overseas investors, and stuffed with former stock-market participants who have given up on equities.

But these sentiment gauges, and the miniscule return, have not, and probably are not, the reason why the long end of the curve could be forming a top.

My "guess," IS that EITHER the US economy is getting stronger (huh?), OR just the opposite-- the economy is getting MUCH WEAKER, which will require another round of QE in the form of mortgage buying, NOT TREASURY PURCHASES.

Could it be that at these levels of prices and yield, that there is NO OTHER DEMAND for Treasurys—Other than the Fed? If there is a grain of truth to my supposition, then increasingly, the Fed will focus on the mortgage-housing market relationship going forward, while allowing longer-term interest rates to climb, thereby "helping" the banking sector, savers, et al.

Whatever the case, the TBT's MUST hurdle and sustain above 16.15/25 to initiate some serious upside traction.

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